RIL, SBI sign shareholder pact for payments bank joint venture

Reliance Industries (RIL) has signed a shareholder agreement with SBI to set up a payments bank joint venture

Shareholder Agreement: Reliance Industries Ltd. with a 70 per cent
equity contribution and SBI as joint venture with a 30 per cent equity contribution

About Payment Bank:

a payment bank is generally a non-full service niche bank in India. It is a distinguished bank that will undertake only limited banking functions which are allowed as per the Banking Regulation Act of 1949. The licenced entities as payment banks could only receive deposits and offer remittances. They cannot undertake lending activities.

What Payment Bank Do:

• Accept demand deposits from individuals, small business or other similar entities.
• Take cash deposits to the limit of Rs. 1 lakh (this might be raised later by the RBI depending upon the performance of the bank).
• Set up branches, ATMs and correspondents
• Issue debit cards and offer internet banking facility
• Sell mutual funds, insurance and pension products
• Accept remittance to be sent to multiple banks and receive remittances from them too

What Payment Bank Don't Do:

• Lend loans
• Issue credit cards
• Accept NRI deposits
• Set up subsidiaries for non-banking financial services.
• Offer other financial/non-financial services of promoters.   

Important Question for Competitive Exam from this Current Affairs:

1. Reliance Industries signed a shareholder agreement with ____________ bank to set up a payment bank joint venture: a)Dena Bank b)State Bank of India c)ICICI Bank of India d)Yes Bank
2. Maximum amount that can a payment accept as a deposit is: a)10 Lakh b)1 Lakh c)1 Crore d)5 Lakh